Selling prices and listing prices are usually different.
In most markets they sell for less than listed, Reno is in that kind of market as I write this article. In some hot markets, of course, they may actually sell for more. Reno is in fact experiencing this as well--but only in the $170,000 and below price range.
In making offers to the sellers
Pick out all sales for similar houses (me or your agent can do this for you), then try to get as close a match as possible. But due to the falling real estate prices, your offer for the seller will most likely be lower than the comparables from a year ago (not necessarily applicable for under $200,000 prices).
But in any case seeing the year's previous prices will still be a great boost in helping you decide what price to offer for your dream home. When you are comparing homes it is important to get as close a match as possible (same number of bedrooms, bathrooms etc ). Normally, you will find half a dozen sales or more.
*note: features such as a new kitchen or bathroom or other remodeling do add to the value of a house. However they don't normally make the house significantly more valuable than its neighbors. Any house that's priced more than 5 percent above its neighbors because of improvements may be a "white elephant."
How much should I offer?
Sellers, by nature, ask more for than what they're willing to take for their homes.
They are expecting to come down some, hence, the above-market asking price. If you pay for exactly what the seller is asking, you could be spending too much. Again, a little bit of research can go a looooong way.
For example: if you find a gem of a deal in South Reno for less than $225,000, I think it will be foolish to NOT pay for full price or even a little higher. Why is this? A little bit more of research will show us that there are barely any homes in that price range in this great of an area.
As a matter of fact, as I am writing this post one of my listings in Damonte Ranch Reno which is listed for $225,000 just got two offers. I put it in the market last Friday.
But if you're in the Reno market looking for a $475,000 dream home, then that's a different story. Research tells us that this price range is not selling as well as it used to be.
Reno homes between $400,000-$500,000 (units sold):
(click image to enlarge)
Reno homes between $400,000 - $500,000 (median price):
(click image to enlarge)
Sometimes a seller will only come down a few thousand dollars. Other times they may drop 10 percent or more. And, or course, there's that occasional seller who refuses to come down a dime. (and in very hot markets, there are multiple offers from buyers,and to win you must pay more than asking price).
Lastly--know thyself
Are you more of an investor or a habitat buyer? Are you in love with the property? Or can you just walk away? Are you willing to make offers on a dozen properties before getting one? Or is the whole process so overwhelming that you simply want to get it over with?
How you answer these questions should guide how low...or high an offer you make.
Good advice Joe, it's just that we buyers can't help but stay on the fence and wait (esp if we can afford it) for the best deal.
Plus, with the economy not doing good, it's a little bit scary, saying the least.